Vons Reports Profit Doubles as Restructuring Nears End

Vons said Thursday that fourth-quarter profit from its supermarkets more than doubled, capping a year of solid increases in per-store sales.

For the final quarter of 1995, Arcadia-based Vons earned $21.1 million, or 48 cents a share, on sales of $1.22 billion, compared with year-earlier profit of $9.1 million, or 21 cents, on sales of $1.17 billion.

For the full year, net income rose from $26.6 million, or 61 cents, to $68.1 million, or $1.55. The 1994 figures were reduced by $33 million as the result of corporate restructuring.

In a statement, Vons Chairman Lawrence A. Del Santo said sales at stores open more than a year increased by 3.5%.

Those gains offset the fact that Vons, Southern California’s second-largest supermarket chain, was operating six fewer markets at year-end than at the beginning of 1995. Overall sales for the year were about $5 billion, the same as a year earlier.

Vons has 328 stores under the Vons and Pavilions names. It said a major restructuring begun in 1993, which included many store closures as well as cost cutting, is almost complete.

“We are pleased with the progress we made in 1995 and we believe we have additional opportunities for growth in 1996,” Del Santo said.

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J.C. Penney said fiscal fourth-quarter earnings fell 24% because of stiff competition and winter storms that hurt sales in January.

The nation’s fifth-largest retailer, based in Plano, Texas, said net income declined to $326 million, or $1.39 a share, short of the average estimate of $1.54 by Wall Street analysts. Penney earned $428 million, or $1.78, a year ago.

In five of the last six months, attacks on Penney’s stronghold in apparel by rivals such as Sears and Wal-Mart have resulted in lower sales at stores open at least a year, or same-store sales.

Penney, like most other major retailers, was hurt by winter storms in the Midwest and Northeast, which led to a 2.5% decline in January same-store sales.

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Pharmacia & Upjohn said fourth-quarter earnings for the recently merged company rose 13%, reflecting lower costs and higher revenue from licenses and other marketing arrangements.

The drug maker, created in November with the merger of Sweden’s Pharmacia and Kalamazoo, Mich.-based Upjohn Co., said profit from operations rose to $217 million, or 42 cents a share, from $192 million, or 38 cents, a year earlier.

The combined company has been reorganizing and cutting costs, including a 10% work-force cut that will eliminate 4,000 jobs.

In the most recent quarter, Pharmacia & Upjohn took a charge of $179 million, or 35 cents, to cover restructuring costs and the expense of combining the two companies, making net income $38 million, or 7 cents.

At a Glance:

Dell Computer, the world’s largest direct marketer of computer systems, reported record annual profit of $70 million, or 70 cents a share, in its fiscal fourth quarter, compared with $60 million, or 68 cents, in the year-ago quarter. . . . Wendy’s International’s fourth-quarter profit declined 14% to $18 million, or 15 cents a share, compared with year-ago earnings of $21 million, or 18 cents.